Subject: File No. S7-25-97
Date: 11/22/97 12:28 PM
22 November 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attn: Jonathan Katz
Dear Mr. Katz:
The rules (re: File No. S7-25-97) recently proposed by the S.E.C., if
adopted, will seriously weaken the shareholder movement that over the past
two dozen years has publicized corporate shortcomings ranging from
polluting the nations water and air to assisting South Africa's apartheid
regime.
Current procedures allow shareholders with at least $1,000 worth of
common stock to place a resolution on a company ballot. If the resolution receives
3% or more of the vote on the first ballot, it can be re-introduced the next
year. In succeeding years, it must garner increasing support, 6% and then
10%, in order to be re-introduced. Under the proposed new rules, however,
submission thresholds would be raised to 6, 15 and 30%.
Even worse, corporate management would be granted a power currently
reserved to the S.E.C.:that of deciding whether a resolution is worthy of
shareholder consideration. Under the new rules, if a company chooses not to
place a resolution on the ballot at all, filers must, on their own
initiative and at their own expense, successfully petition 3% of all
shareholders to force the resolution onto the first ballot. Three percent
of most Fortune 500 company shareholders is so enormous as to make such a
requirement virtually impossible to meet.
Shareholders have the right, through the proxy, to call top management
to task if it is managing the shareholders investment badly or behaving in a
way that brings shame or disrepute on the company they own. The proposed
new S.E.C. rules essentially removes this right. I urge you not to adopt
these rules.
Thank you.
Sincerely,
Russ Moritz
Shareholder